Borrowing on credit cards at high interest rates might appear irrational. However, even low transactions costs can make credit cards attractive relative to bank loans. Credit cards also provide liquidity services by allowing consumers to avoid some of the opportunity costs of holding money. The...

When households face credit constraints in an economy with inside as well as outside money, stationary equilibrium real interest rates are below the household rate of time preference. They also depend significantly upon household risk aversion, the demand for inside versus outside money, bank...

The authors investigate a stationary equilibrium investment sequence in an industry where the costs of investment display initial economies of scale, but eventually decreasing returns to scale. Both the timing and size of new investments are choice variables, and they allow the industry...

Hoarding of money-supply increases can explain long and variable lags from money-supply changes to changes in aggregate expenditure and average prices. The Archibald-Lipsey model relies upon differences in income elasticities of demand for real money balances to explain aggregate hoarding of...